American Express Customers Are Most Satisfied, HSBC, Least

By consumerist.comOctober 17, 2007

American Express ranks highest in customer satisfaction in the J.D. Power and Associates 2007 Credit Card Satisfaction Study. They said there’s two types of customers. One is transactors, who pay their bill off in full each month and for whom membership benefits are the most important drivers of customer satisfaction. The other is revolvers, who don’t pay their bill off in full each month, and for whom APR and fees are the most important drivers of customer satisfaction. So if we flip this survey over….

…we can figure that HSBC, Bank of America, and Capitol One probably have the fewest membership benefits, the highest fees, and the highest APRs. These three companies are certainly not well-liked among our readership.

J.D. Power and Associates attributed the high marks for American Express to the array of membership benefits their cardholders have. While airline miles are some of the most widely dispensed and used membership benefits in the credit card industry, the study found that cashback rewards have a greater impact on customer satisfaction.

Interestingly, while membership benefits drive much of customer satisfaction, most customers are unaware of all the benefits that they have, a factoid provoking enough that we’re going to check in with our credit card company to make sure we know the full power of our plastic.

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Part of this is that American Express is known amongst a number of businesses for their tendencies to side with the customer very quickly in many disputes. Ever wonder why some places don’t take American Express?

I think your interpretation is a little off. There is a sort of selection effect going on here, where some companies (like Amex) attract people who pay off their balances and other companies have a lot of revolvers (like HSBC, which went out of its way to court new customers, who are frequently revolvers). But revolving customers are the ones who fall behind on balances, pay fees, and are of course unhappy about this. They also call the company more about their balances and have more chances to be dissatisfied. Thus, although the companies are somewhat at fault because of their customer service, they simply have more customers who tend not to like them. If you gave HSBC the customers that Amex has, I think it wouldn’t be at the bottom. The point is, if you are a bill payer and avoid trouble, you will be happy at any bank, and if not, even the best bank will make you mad.

The other point in the article is that Amex and Discover wholly own the financial networks that they operate over. As a result, they can control the customer experience for the entire transaction. Versus Visa and Mastercard, where your purchase goes through 5 different agents before reaching your bank account, each having a possibility of trouble.

I have been screwed a few times from retailers and all I have to do is log into my account online and click dispute charge. Its just that easy.

There are so many online retailers that send the wrong products and expect you to pay for their mistake by paying sometimes over $10 to ship their mistake back to them. I always refuse to be pay more for their mistakes and when they refuse to fix the situation I just do a chargeback.

I applaud Consumer Reports for at least including credit unions, and the awesome service provided by USAA credit cards. Almost everyone in this nation has access to a credit union, so why aren’t they rated?

@swissdietcoke: Took the words right out of my mouth. USAA was a breath of fresh air after the crapfest that is banking with Bank of America. They’re #1 in customer satisfaction in my book – customer service is always polite and helpful.

AmEx also doesn’t endear some merchants by offering discounts, etc. for shopping online.
I recently called AmEx after realizing how high my APR was. After I asked, they cut it almost in half. That certainly moved them up in my book.

My personal experience is pretty close to the JDP survey. I used to have a bunch of cards that I never used except to get the freebee’s they offered. Then of course I discovered that even having unused credit cards hurt my FICO score. Dropped them all for Discover that I mainly use for gasoline purchases and the rebates it pays on gas. I’m fortunate that I can pay credit cards off each month so intrest rates aren’t an issue.

Actually it is because Amex is more expensive for the merchant- their % and fees are higher. Otherwise, most merchants don’t care about the customer friendlyness (and like the upscale customers which prefer Amex).

If Amex dropped their fee to Visa/Mastercard levels they would have the same adoption rate.

Two notes- I have Amex and Citi Cards as my experiences match the JD results.

and Amex does offer revolving credit cards (like Blue).

The reason people dislike the bank card on the bottom of the survey, is that the banks simply don’t care that you hate them. They would rather trick you into a higher rate or excessive fee with incessant rule changes then worry about you leaving.

@Saydur: I once worked for a company that didn’t take American Express for exactly this reason. Didn’t help that the product (scammy travel discount directories) completely warranted a high return/dispute rate…

I agree. I recently got a pre-approved for a Costco American Express, which I don’t understand since I’ve opted out. Anyway I was all excited to call and ask about this card when I noticed the rates started at 17.9%! Normally I LOVES me some Costco, and they love me back, but 18%? Meh. I have a 744 credit score.

I recently got another card from my friendly neighborhood credit union, and the rate was 11.375% with some phony rewards program, and an introductory rate of 3.99% for 6 months. Not too shabby.

Sorry but I ALWAYS use my AMEX whenever possible over my other cards. Superior customer service (I have NEVER gotten a CS agent from India or outsourced country), better handling of transaction disputes (do it all online), and better rewards.

I can understand from a small business perspective why they might not like taking AMEX, but in my past experience with restaurants the very good ones either take cash only or they take all three. Every time I go to a restaurant that takes visa/mc only, I either get terrible customer service or sub par food, or (usually the case) both.

@Saydur: Actually the reason many businesses don’t take Amex is because they take a higher % of the purchase. So it is not appealing to many businesses to accept Amex.

In terms of BoA I had a bad/good experience with them recently. I had problems cashing a foreign US funds check (because Canada might as well be Nigeria in the eyes of US banks). For some unexplainable reason, you cannot put foreign checks into an ATM for them to cash, you MUST visit a branch. This defeats the entire purpose of ATMs, which to me are there so I do not have to deal with the bank directly in any way! So I was kinda miffed at this point because I needed that money to pay off a hefty bill.

The good part was I called the executive support line for BoA. They were actually very friendly. Luckily I had a BoA credit card with a 0% balance transfer APR on it. Since I needed to pay off my Capital One (which I used to get around the foreign exchange ding that most cards suck you for), I suggested they balance transfer from my Capital One to my BoA card and waive the balance transfer fee. They had to get back to me but they assured me that it was ok and to do the balance transfer. I did it and they called me back to confirm everything was ok.

So while I’m still confused why I can’t cash a foreign check in an ATM, and I don’t know what I would have done if I didn’t happen to have a BoA credit card, they seemed to handle my situation well. I would say this is an instance of one step back and two steps forward in terms of my impression of them.

I have had an AMEX card for 20+ years. The AMEX customer service is second to none, I am always satisfied after having spoken to them about issues with my account (doesn’t happen often but it does happen.)

Recently, I received a call from AMEX security stating that suspected that my card was compromised as was being used by someone else. The read back to me the most recent charges until they reached those that I actually recognize. The others NEVER appeared on my bill. They issued me a new card number and sent it via FEDEX, I received it the next day.

I don’t give a rats ass that they charge merchants more for my card use, I use it whenever I can. I also like their rewards program.

I have a backup visa for use only in the cases where a merchant doesn’t accept AMEX. Other than that I am credit card free…

I definitely agree that HSBC sucks! I’ve been fighting with them for months about an identity theft issue. Unfortunately, I have not yet had the time and energy to email and fax-bomb them because of all the other bureaucratic messes in my life. However, for all you other HSBC haters out there, please check out [householdwatch.com] which is a HSBC watchdog site.

@satoru: Yes they do charge a higher overall merchant rate (that differs by industry) but it’s the same rate at the merchant no matter what type of Amex card you use.

Visa/MC have been involved in some shady practices to jack up their rate. A customer with an existing consumer credit card will be reissued a small business credit card which commands a higher rate, despite the fact that they may not be a small business or have no interest in using a small business card. They do the same with high spending individuals, issuing them “Signature” cards (for high net worth individuals) without their request. My girlfriend got a signature card despite the fact her spending pattern hadn’t changed for years.

Merchants probably aren’t saving as much by not taking Amex as they think.

Amex’s reputation is legendary, but I can’t stomach the idea of PAYING to have a credit card, especially THAT high. Are their rewards really worth the high annual fees? $450-$2,500/yr just to have a credit card? Absurd, unless they’re providing me services which exceed that value.

I have a Wachovia Visa Signature card which appears to offer all of the same benefits of the Amex cards, complete w/concierge, 1.5% cash back on everything (unlimited), and doesn’t cost me a dime.

@elf6c: Interesting… I never knew Amex offered any sort of revolving card, not that I’d ever carry a balance on anything, but that just seems to go against everything Amex was for in the old days.

@FLCONSUMER: Amex has a number of credit cards (revolving) in addition to the old fashioned charge (non-revolving) cards. A number of the Amex credit cards don’t have an annual fee, though I think all of the charge cards do. Personally, I have the Clear card from Amex, and I love the benefits. I’ve yet to have a need to call customer service about, but from what I’ve heard from everyone (and this report) is that it’s great.

@TheBigLewinski: You don’t give a rat’s ass about the fee charged to merchants? I think you should be. Many businesses don’t accept A/E because the fees are the highest compared to Visa and MC. However, they are trying to catch up to the competition but these fees are passed on to consumers. Only those who participate in rewards program benefit from the fees.

Here is the thing I like. Discover Card members often don’t have any other choice in credit cards. Many of their customers are first time cardholders. American Express isn’t typically your first credit card since they require two years of credit history and a decent credit score before you are approved. American Express has card members who could literally have any credit card they want, and they probably have. So when comparing the top two on the list you have a company populated with the most credit saavy consumers on the planet and the company with the most unuducated consumerists on the planet. When you survey Discover Card members and ask them who is the greatest company in the world, OF COURSE THEY’LL SAY DISCOVER. They don’t have any other point of reference. I think the fact that American Express beat Discover is a huge deal. It is hard to beat the ininformed when it comes to this kind of thing. The most credit educated consumers in the world say that American Express knows how to treat their customers. That says something.